“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a twenty year period?
Today, let’s look backwards in time to 2004, and take a look at what happened to investors who asked that very question about DaVita Inc (NYSE: DVA), by taking a look at the investment outcome over a twenty year holding period.
| Start date: | 09/20/2004 |
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| End date: | 09/17/2024 | ||||
| Start price/share: | $15.52 | ||||
| End price/share: | $164.22 | ||||
| Starting shares: | 644.33 | ||||
| Ending shares: | 644.33 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 958.12% | ||||
| Average annual return: | 12.52% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $105,894.93 | ||||
As we can see, the twenty year investment result worked out quite well, with an annualized rate of return of 12.52%. This would have turned a $10K investment made 20 years ago into $105,894.93 today (as of 09/17/2024). On a total return basis, that’s a result of 958.12% (something to think about: how might DVA shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“You can’t restate a dividend.” — Malon Wilkus
